Social media gets discussed ad nauseam as a marketing tool, but it does have other business applications. In the case of customer service, that’s something apparently ignored by many businesses.Only 44 percent of the top 25 online retailers respond to complaints on Facebook within 24 hours according to the data compiled by Desk.com. Open this article

Ever go public online with something your brand will regret later? Alas, it’s human nature. But there are ways to combat that! The plain fact is, we all have the ability to knee-jerk ourselves into orbit a wee bit past the Alpha Centuri moon. I do it, you do it, we all do it. The challenge is to sit on your hands until that extraordinarily compelling urge *disappears* so you can comment without being in the red flare of unstoppable…Open this article

Facebook has a folder for messages into which it unceremoniously dumps email from people who don’t normally contact you. Because hardly anyone ever checks this “other” folder, many very important messages to missed. Every once in a while, a writer will ask his readers to go check their “Other” folder to crowdsource the discovery of surprising messages that have been sitting there. Recently, New York Times columnist David Pogue asked the question, and the…Open this article

A growing number of consumers around the world are contacting brands through social media channels, to the extent that customer service and audience engagement is now seen as one of the top organizational areas where social tools carry the most heft. Results from a new study [download page], conducted by Havas Worldwide, suggest that consumer expectations are high for social responsiveness, and that brands that fail to meet those expectations risk alienating a large portion of consumers. Open this article

This an excerpt from the opening chapter of Attack of the Customers: Why Critics Assault Brands Online and What You Can Do About It by Paul Gillin and Greg Gianforte. Buy the book on Amazon.

In March, 2010, Procter & Gamble announced the most significant technical advance in disposable diapers in a quarter century. The new Dry Max line featured an absorbent gel that improved diaper efficiency while cutting materials and costs by 20%. The thinner diapers addressed the number one complaint of diaper customers, which was bulk, while also reducing cost and environmental impact. The innovation was so impressive that former president Bill Clinton praised the diaper for reducing landfill waste.

However, Rosana Shah of Baton Rouge, LA was not impressed. Shah had noticed a change in the Pampers Cruisers she used to diaper her baby several months earlier. “The new design had less cotton pulp and was missing the dry weave liner,” she wrote in an e-mail interview. “The back of the diaper was just thin, papery diaper cover, no absorption material whatsoever.” Worse was that the child had become afflicted with diaper rash. “Every time I tried to change her diaper she would cringe and cry,” Shah wrote. “All she could voice at the time was ‘it hurts.’”

Shah believed P&G had substituted a cheaper Cruisers for its existing product and not told anyone about it. “I called Pampers and complained and was told this was the first they were hearing of these issues,” she wrote. “When I asked if there was a change in design, they denied it at first.”

In fact, Shah’s suspicions were correct. P&G had actually begun shipping the new product in August, 2008, more than 18 months before it was announced. The practice is called slipstreaming, and it’s common in high-volume consumer packaged goods markets that manufacture products by the millions at facilities around the world.

“Figuratively, if you’ve got 500 diaper production lines, you convert the first line on day one and 500 days later you convert the 500th,” explained Paul Fox, P&G’s director of corporate communications. “During that time you’ve got a mix of the old and new product on the market.” New products typically aren’t announced until the distribution pipeline is full, but by that time millions of people may already be using the new product.

That was the case with Pampers Dry Max. By the time of the early 2010 rollout, more than 2 billion unbranded Dry Max diapers had already been sold “without issue,” Fox said. P&G had carefully monitored its customer support calls for evidence of customer dissatisfaction but had detected nothing out of the ordinary. The company typically logs two complaints for every one million diapers sold, and there was nothing to indicate that Dry Max had moved that needle.

Not that P&G expected big problems. The company was well aware that the entire Pampers franchise depended upon customer trust. “Not a grain of sand was left unturned” in Dry Max safety testing, Fox said. “A brand whose whole equity is based on babies’ welfare isn’t going to do anything that poses any form of risk to a baby.”

So staffers were understandably concerned when a Facebook group appeared in late 2009 entitled “Pampers bring back the OLD CRUISERS/SWADDLERS.” The group was launched by Shah after her visits to the Pampers Facebook page and Pampers website convinced her that “many parents were also experiencing confusion.” The group’s initial demands were simple: Members wanted P&G to bring back the old diapers. But as membership grew it became a lightning rod for an assortment of other complaints and accusations.

Building on early charges that P&G had failed to adequately disclose changes in the product, members began complaining of leakage and flimsy construction. By spring the discussion was centered on complaints that Dry Max diapers caused diaper rash.

Members reported that children were developing blisters within hours of being diapered with Dry Max. References to “burn marks” emerged, followed by reports of “chemical burns.” One mother of multiples reported that all four of her children were suffering severe diaper rash. The culprit was clear: Dry Max diapers were inflicting agonizing pain on babies.

No one was actually citing any scientific evidence to support the claims, and a few voices noted that gap. However, some doctors were telling parents that the diapers were a possible culprit and that was good enough to stoke the outrage.

In February, 2010, a visitor began a campaign called “Flood the CPSC!” encouraging others to take their complaints to the Consumer Products Safety Commission. In May, a group of parents filed a class action lawsuit.

At P&G’s Cincinnati headquarters staffers were alarmed and perplexed. Diaper rash is an unfortunately common occurrence that afflicts about one in four babies at any given time. The company dispensed advice to concerned parents about the topic through a variety of channels, pointing out that while a tight-fitting diaper may create the conditions for diaper rash, the problem was not caused by the diaper itself.

Staffers were convinced of Dry Max’s superiority. The product had been heralded as a breakthrough by Good Housekeeping magazine and had already received several awards. How could consumers not see its benefits?

Many of the 11,000 members of the Facebook group didn’t. They believed that the thinner diapers were simply a low-cost replacement for the product they had known and loved. They believed P&G was shoring up profits at the expense of their children’s health.

Standoff

As complaints piled up, a conspiracy mentality took hold. Visitors griped about everything from rude P&G customer service reps to price changes. A change in a store display at a local Walmart was evidence that P&G was undertaking a stealth recall. Journalists were requesting interviews and by late spring the story had begun showing up on local TV stations

By the time Paul Fox arrived on the scene, the Dry Max protest was beginning to spin out of control. Jodi Allen, P&G’s vice president of North America baby care, was taking a personal role in countering critics, posting comments on the Pampers website, recording web videos and participating in discussion groups. However, the volume of complaints was piling up too fast for the P&G staff to handle.

Allen was banned from the Facebook group, an action that Shah said was justified because P&G had not provided a place on the Pampers website or Facebook page to state its case. However, Allen’s membership in the group had been blocked because Shah said the executive had made no attempt to request membership. She also called Allen’s comments “scripted statements” that lacked sincerity.

Fox is a 30-year media relations veteran with more than a decade at P&G and experience with the customer skirmishes that are a constant fact of life at such companies. Fox first urged the team to investigate all possible causes for the complaints. Was it possible that the manufacturing line was compromised or that product had been tampered with in the field? Satisfied that the answer was no, he focused the strategy around a few core principles:

Get P&G off the defensive;

Dispel rumors that P&G would reintroduce the discontinued products;

Educate parents about diaper rash;

Refocus the discussion on the welfare of the children.

The final point was particularly smart. P&G was engaged in a vicious circle of accusation that had transcended diaper rash and become a proxy for helpless consumers versus heartless corporations. By concentrating on child safety, P&G effectively allied itself with its critics. Amid the charges and counter charges, no one had ever suggested that child safety was not the overriding concern of all parties. Accused and accuser were effectively now on the same side. That was an important step.

Pampers staffers also had to be encouraged to restrain themselves from countering point criticism, particularly that which was nothing more than opinion. “Responding to inflammatory stories that have little basis in fact is a distraction,” Fox said. “Engaging on that level can be the equivalent of throwing gasoline on the fire.” Basically, when critics become convinced you can’t do anything right, then you can’t.

Instead, P&G focused on educating dispassionate opinion leaders who appeared genuinely interested in hearing both sides of the story. It brought two groups of “mom bloggers” to Cincinnati to meet with executives and scientists and address their questions. It stepped up advertising about the benefits of Dry Max and posted videos by leading pediatricians about the causes and treatment of diaper rash. “If parents weren’t seeking medical attention or treating the diaper rash, that was a big concern,” Fox said. “Our focus was ‘We are both concerned about the pain of diaper rash. Let’s seek treatment.’”

The company began making a more focused effort to spend time explaining diaper rash to parents who called. It even sent representatives into the field to meet with particularly concerned parents. The company invited media to Baby Care Headquarters in Cincinnati to meet with developers and product managers. In contrast to the earlier defensiveness P&G had shown about the controversy, it was now displaying complete transparency.

Vindication and Lessons

The turning point came in early September when the CPSC, which had agreed to investigate the case after receiving hundreds of letters, absolved Dry Max of any responsibility for diaper rash. By fall the volume of complaints had slowed to a trickle and P&G was no longer discussing the incident. Shah’s group is still on Facebook, but new posts appear weekly instead of hundreds per day.

Even absolution from the government watchdog hasn’t convinced critics. Shah charges that P&G enjoys a cozy relationship with the CPSC that may have prompted the agency to downplay its findings. She also cited media reports that claimed portions of the agency’s report are missing. A spokesman for the CPSC said the agency works with hundreds of companies on various standards committees and the charges of collusion are baseless. “Just because we know people doesn’t indicate any impropriety,” he said.

Fox called the collusion allegation “an insult” and said the only information missing from the report is that which was mutually agreed to be proprietary, a statement the CPSC spokesman confirmed.

Could P&G have handled the Pampers Dry Max case better? Probably. By slipstreaming a product into the market that was noticeably different from the one it replaced, the company invited scrutiny. The fact that Dry Max looked on the surface to be a cheaper diaper didn’t help. However, the Pampers team was so convinced of the product’s superiority that they focused more on the positive splash it would make in the market than the possibility that some people might be alarmed by the visible changes.

P&G knows better than any company that people treat their personal care products like an old friend. Change can be unsettling, in the same way that an old friend showing up at a party with a nose job and a new wife might cause unease for everybody.

The incident was also a classic example of the suspicion with which many people regard large companies. As a member of P&G’s Digital Advisory Board, Paul has worked with brand managers in many of the company’s divisions and been impressed by their commitment to quality and customer satisfaction. However, few customers are fortunate enough to have that insight. Many people see a large corporation as a symbol of greed. An incident like this reinforces that perception.

Critics accused P&G of opacity in its initial response to customer concerns. There were valid reasons why the company didn’t tell critics that the diaper’s design had been changed before the official announcement. There was no way to fill the supply channel with the new product without slipstreaming, and P&G wanted to wait until Dry Max was available everywhere to turn on the marketing spigot. Dribbling out details months before the formal launch would have undermined the formal rollout and created confusion that the company was not prepared to handle. Nevertheless, plausible explanation would have been better than denial. Once the conversation shifted from accusations to education, the tone changed dramatically. Pampers sales quickly recovered after a brief decline and complaints fell back into normal range.

The Dry Max crisis came at a time when P&G was engineering a companywide shift toward customer engagement through social media. Fox says the experience was a critical teaching point. “You can’t join a community at a time of crisis. You have to already be invested,” he said. “Becoming a trusted voice requires an investment of time, people and money.”

The experience was a lesson for Rosana Shah as well. “We found parents and caregivers from as far away as South Africa, Australia, England, France and Germany. Everyone was scratching their heads wondering if it was just them,” she wrote. “We turned out to be 11,000 members who made the media, government bodies and P&G finally take notice.”

I followed Microsoft closely for many years when I was in the technology press, visited the company every year or so and even sat down with Bill Gates for interviews a few times. I was always impressed by the competitiveness of the Microsoft culture, and wondered whether it could resist the disease that killed companies like Digital Equipment, Wang Laboratories and Compaq, and that nearly killed IBM and Novell.

That disease is described in Clayton Christiansen’s 1997 classic The Innovator’s Dilemma. Companies that dominate technology industries tend to become so addicted to the products that made them successful that they fail to respond to changes in the market and are done in either by low-cost competitors or a platform shift.

A new article by Kurt Eichenwald in Vanity Fair paints a dismal picture of Microsoft’s performance over the last decade and doesn’t offer much optimism for the future. The article is currently available only in the printed edition of VF, but you can find a summary here and dig up scans of the printed piece if you look around a bit.

Creeping Bureaucracy

Eichenwald documents a decade of missed opportunities, unforgivable delays, bureaucratic infighting and intellectual stagnation that made this once-fearsome competitor a caricature of the company that regulators on two continents tried to break up a little more than a decade ago. He recalls the Windows 95 launch, when people lined up around the block outside consumer electronics stores to get the first copies. Today, the idea that anyone would get that excited about any kind of Microsoft product launch seems unfathomable.

I only have a couple of comments to add to this well-reported piece. The first is that Bill Gates’ departure from the helm of Microsoft at the end of 1999 was the beginning of the downward spiral. While many people thought his self-imposed demotion from CEO to Chief Software Architect was a ruse at the time, it now appears that Gates really did step away from active management of the company.

He handed it over to the wrong guy. I personally like Steve Ballmer, and I have great respect for his competitiveness and sales/marketing skills, but he’s not a product guy. It seems that great tech companies only stay on top as long as there are technical visionaries at the helm, and it’s clear that Microsoft lost its vision years ago. Jim Allchin and Ray Ozzie perhaps had the technical chops to do the job, but neither seemed to have the natural leadership skills. Ballmer is the perfect guy to take a completed product and drive it into the market, but he’s obviously not the guy to get the product to market in the first place. I don’t see that changing, and I don’t see Microsoft turning around as long as Ballmer is in charge.

Misplaced Management Technique

My second comment is about the Microsoft management tactic called “stack ranking.” This forces managers at review time to designate two people out of every 10 as superstars, seven as average and one as trouble. The person at the bottom isn’t likely to be around very long.

The goal of stack ranking is to force managers to make hard decisions about weak performers. Most managers hate even to give bad reviews, much less fire people, and stack ranking enforces a certain toughness that many managers could use, in my experience. It sends a message to the organization that poor performers won’t be punished by merely getting a 2% smaller raise than the top performers.

The problem is that stack ranking doesn’t work in organizations that put a premium on innovation and creativity. If Xerox had used it at PARC in the 1960s, we’d probably still be using MS-DOS today. Creative people shouldn’t have to worry about sucking up to managers and competing with the person at the next desk. They should spend their time being creative. Stack ranking works great for sales forces and process-oriented jobs, but it’s a disaster when applied to engineers, programmers, graphic artists or writers.

A lot of people are beating up on Microsoft right now, and with good reason, but this company is hardly a basket case. Futurist Thornton May recently told me that Microsoft goes into the top engineering schools each year and scoops up as many of the best graduates as it can get. It has a desktop franchise that won’t stop throwing off cash anytime soon and its position in the corporate data center is secure. The biggest problem there is that the future of the corporate data center is in some doubt right now.

Eichenwald contrasts Microsoft’s performance to Apple’s, and the Redmond giant comes off looking pretty pathetic. But then again, so does everyone else. This piece will hopefully cause some soul-searching within the Microsoft executive suite, and maybe restore some of the drive that once made that company so terrifyingly great.

Update:Dan Gillmor reaches much the same conclusion, although for different reasons. He points to some Microsoft innovations that the VF piece overlooked, and also notes the depressing effective of an antitrust settlement on the way a company works.

There’s a crisis brewing for Progresso, and it’ll be interesting to see how – and if – the soup maker responds.

The trouble was kicked off by a recent NPR report that looked at the potential health risks of eating food stored in cans that uses the industrial chemical bisphenol A (BPA). BPA is an industrial chemical that has been linked to everything from infertility to cancer and cardiovascular disease. Recent research has concluded that canned food is a source of BPA exposure but does not answer the question of whether that exposure is a health risk. Nevertheless, some food makers – including Campbell’s – have already taken the proactive step of announcing that they will eliminate BPA from their containers.

Progresso hasn’t said anything yet. Now a petition on change.org demands that the company remove BPA from the linings of its soup cans. The petition was posted nine days ago and already has 95,000 signatures. It was the subject of a dedicated e-mail from change.org, which no doubt will move that number higher pretty quickly.

Progresso’s only viable strategy may be to announce that it’s eliminating BPA from its packaging, but that’s a bigger issue than crisis communications. What should Progresso do? It’s still early and they might actually be listening.

Update, 7/2/12: Progresso has begun responding to concerns posted on its Facebook page with a statement that I think is well-crafted and helpful. While the soup maker doesn’t commit to anything, it does acknowledge customer concerns and promises to at least investigate alternatives. The important thing at this stage of a potential crisis is not to leap to conclusions but to state that you are aware of the problem and are looking into it.

We take the concerns around BPA very seriously, and we wanted to let you know a little bit more about this topic and how we are pursuing other options. BPA is used in the lining or lid of most metal food cans in the U.S. to help preserve food and maintain nutritional value and quality. Scientific and governmental bodies worldwide have concluded that BPA is safe. However, we know that some of our consumers would like us to pursue alternatives, so we are currently working with our suppliers to develop and test alternative linings that do not use BPA. While we pursue these options, we’re entirely confident that the current packaging is safe for the fans of our soup. Thanks for reaching out to us, and we hope we can keep providing you with delicious soups in the future!